Holiday Lets increasingly attractive investment for new landlords

The staycation craze has made holiday lets a far more attractive proposition to many would-be landlords, according to a new survey.

Research from the Suffolk Building Society suggests that 17 per cent of adults have contemplated buying a holiday property to let out.

Younger people led the trend, with those aged 18 to 34 most likely to have thought about buying a holiday let property within the past 24 months. 

Two urban areas had the highest number of prospective landlords, with those living closest to London at 32 per cent followed by people in the West Midlands on 19 per cent.

The building society itself says completions for new holiday let purchases doubled between 2020 and 2021.

The setting of the property was more important than other factors such as renovation potential, or proximity to amenities, for potential landlords. 

The key aspects for prospective landlords when considering buying a holiday let were being in or near beautiful scenery, a beach or coastline; having a property that was easy to manage; and being in an area already familiar to the prospective landlord.

Suffolk Building Society’s head of intermediary relations, Charlotte Grimshaw, says: “The younger demographic in particular, are considering a holiday let future … but it will be important to check they have realistic expectations, with many lenders’ criteria including minimum ages and a requirement to already be a homeowner. 

“… As part of the discussion around holiday let criteria, this may even include signposting clients down the buy to let route as a means of gaining additional income and experience with longer term tenants, before borrowers branch out to holiday let later down the line.”

Of those who expressed their interest in becoming a holiday let landlord, almost a third said Covid-related restrictions inspired them to look into holiday lets. However, half claimed it was always part of their plan.

Devon and Cornwall were the locations that most future holiday let landlords were considering followed by the Lake District, Peak District and Yorkshire Dales.

Grimshaw continues: “It’s easy to understand why the idea of owning a holiday let home is so attractive. As people were limited to holidaying in the UK, often within an area they know and love, their eyes were opened to the opportunity of increasing their income, as well as enjoying a property for personal use too. 

“However, intermediaries should also advise their clients to take the time to understand the market, and check out the competition before falling in love with a property that isn’t viable in terms of lettings.” 

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